Catamaran Adrift
Catamaran Corporation (CTRX) provides pharmacy benefit management (PBM) services and healthcare information technology solutions to the healthcare benefits management industry in North America. A leader in the management of prescription claims, they process about one in five claims in the US. Catamaran is headquartered in Schaumburg, Illinois. The shares trade in the US and in Canada.
[PostStockWidget stock_valuation="" pricetype="live" manual_date="Dec. 21, 2012, 2:04pm GMT" symbolcodes="'CTRX','CCT.TO'" symbolprices="46,51" div_align="right"]
CTRX has been a roller coaster for Purple Chips. Since initiating the position; the shares were in a profit, then a loss, then a profit again.
More importantly, the earnings outlook has deteriorated and the forecast earnings are now 10% lower than when we initiated. It’s time to look elsewhere.
Interestingly, executed on the same days, the CDN market return was fully 9% more due to currency changes
EXIT CATAMARAN AT $45.92 (CTRX, $ 46.10 or CCT-T, $CAD 51.48) HALF POSITION
TOTAL RETURN (no dividends) +8.6% (CDN) or -0.4% (US) Difference due to currency changes.
PURPLE CHIPS TARGET: $47.00 POSITION SIZE: HALF (2.5) P/E: 21X DIV: N/A MKT CAP: $9.6B Debt: $500M RETURN ON CAPITAL: 67% EARNINGS YIELD: 5.8% 5 YR EPS Growth rate*:.35% P/E/G Ratio: 0.6 EPS: $2.00 2015 EST.: $2.62 2016 EST.: $2.96
*Blended growth rate= 2/3 historical (5yrs), 1/3 forward.
